Can anyone prove this equation?

CFA Level II
#1

I struggled for quite some time and can’t figure out the prove to this equation. The answer may be real simple and I’m just overlooking it… (a - c) / (b - c) = ((a - b) / (b - c)) + 1 This is taken from the residual income SS: P/B = (ROE - g) / (Rce - g) can be rewritten as P/B = 1 + (ROE - Rce) / (Rce - g)

#2

(a-c)/(b-c)=(a-b+b-c)/(b-c)=(a-b)/(b-c) +1

#3

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#4

LHS= (a-c)/(b-c) Add and Subt the Numberator by (b-c) =[(a-c) - (b-c) + (b-c)] / (b-c) =[(a-c-b+c) + (b-c)]/(b-c) =(a-b) + (b-c)/ = [(a-b)/(b-c)] + [(b-c)/(b-c)] =[(a-b)/(b-c) + 1] =RHS EDIT: Florin beat me to it…

#5

You guys are fast… Thanks everyone!